Moreover, a reading of the pertinent Department of Interior regulations and applicable case law quickly dispels Plaintiff's argument that the Eastern States Land Office decision of September 24, 1969 was a formal acceptance of his lease offers by the United States.

The regulations prescribing the procedures for obtaining a noncompetitive oil and gas lease provide, and provided at the time Plaintiff filed his offers, that:

The United States will indicate its acceptance of the lease offer, in whole or in part, and the issuance of the lease by the signature of the appropriate officer thereof in the space provided. * * * [43 CFR 3111.1-1(c), formerly 43 CFR 3123.5(b), 29 F.R. 4511 (1964).]

No other manner has been provided, or recognized by any court, for the United States to indicate its acceptance of an oil or gas lease offer.

The Eastern States Land Office decision of September 24, 1969, did not purport to be, and cannot be construed as, an acceptance of any of Plaintiff's lease offers. The decision was issued under the heading "Lease Offer Status." By its terms the decision set forth the order of priority that would be recognized with respect to the nine lease offers filed for section 17; it pointed out defects in the land descriptions of some of the offers; and it required certain actions as a prerequisite to the issuance of any lease. A decision of such nature cannot be interpreted as an alternative form of lease offer acceptance on the part of the United States and cannot operate to overcome or restrict the Secretary's ultimate discretionary authority, at any time before acceptance, to reject a lease offer. Udall v. Tallman, supra.

B. The Defendant Acted Properly in Denying the Award of a Noncompetitive Oil and Gas Lease for Land Determined to Be Within a Known Geologic Structure. The Status of the Land at the Time a Lease Offer Is Filed Does Not Control Under Present Regulations.

If, after the filing of an offer for a noncompetitive lease and before the issuance of a lease pursuant to that offer, the land embraced in the offer becomes within a known geological structure of a producing oil or gas field, the offer will be rejected and will afford the offeror no priority. [43 CFR 3110.1-8, formerly 43 CFR 3123.3(c), 32 F.R. 13324 (1967).]

C. The Department's Regulations Complained of by Plaintiff Are a Lawful Administrative Interpretation and Implementation of the Mineral Leasing Act

Inasmuch as Plaintiff is clearly not entitled to the relief he seeks under the current Department regulations cited above, the only question that remains is whether the regulations are a lawful administrative interpretation and implementation of the Mineral Leasing Act.

To answer this question, an understanding of the history of Sec. 17 of the statute and pertinent regulations is necessary.

Shortly after passage of the Mineral Leasing Act in February of 1920, the antecedent of the regulations in issue here, and the express policy of the Department of the Interior was that no prospecting permit
*fn1"
could be granted "within the known geologic structure of a producing field even though such a status as to the deposits may have arisen only during the pendency of the application for a permit. . . ." Case of Wilmer Jeannette, 47 L.D. 582 (1920).

In April of 1921, under a new administration, Secretary of the Interior Albert B. Fall revoked the then existing regulation, reasoning that the regulation was not based under a mandatory provision of the statute and upon the premise that the rights of an oil and gas applicant were similar to those of a homestead entryman. [Instructions, 48 L.D. 98, 99 (1921)].

Although as early as 1951 there were doubts voiced in the Department as to the soundness of Secretary Fall's interpretation of the statute, then Solicitor Mastin G. White's opinion that the Department should abandon Secretary Fall's view and revert to its original position, was never promulgated and the Department continued for some 16 more years under the policy of Secretary Fall.

In September of 1967, Solicitor Frank J. Berry issued an opinion (74 I.D. 285) in which he concluded that the past practice of determining whether to lease land competitively or noncompetitively upon the basis of facts known at the time of the filing of a lease offer was clearly erroneous and contrary to the ordinary reading of the statute. Following this opinion the regulations were amended as hereinbefore cited.

Nor is the administrative agency itself estopped by its former interpretation of a statute, however long standing, from correcting that which it presently feels to be clearly erroneous. As Mr. Justice Brennan, speaking for the Court, said in Automobile Club of Michigan v. Commissioner of Internal Revenue, 353 U.S. 180, 183, 77 S. Ct. 707, 709, 1 L. Ed. 2d 746 (1957):

The Commissioner's earlier rulings were . . . based upon a mistake of law . . .

* * *

. . . The doctrine of equitable estoppel is not a bar to [his] correction . . . of [that] mistake of law. (Footnotes omitted).

* * * [The succeeding heads of a department] have a right to reverse a practice, even long continued, when clearly convinced that it is founded on an incorrect interpretation of the law. Save in respect of a subject-matter finally closed and settled under the former practice, the decision on which that practice is founded contains no element of estoppel or res judicata, as the doctrines thereof are applicable in judicial proceedings.

Similarly, the Fourth Circuit has held that:

* * * An administrative agency, charged with the protection of the public interest, is certainly not precluded from taking appropriate action to that end because of mistaken action on its part in the past. National Labor Relations Board v. Baltimore Transit Co., 140 F.2d 51, 55 (C.A. 4, 1944), cert. denied, 321 U.S. 795, 64 S. Ct. 848, 88 L. Ed. 1084.

Applying this principle of law to the facts herein, the Court finds that not only were the 1967 regulations authorized under the Mineral Leasing Act but they clearly embody what the Court finds to be the correct interpretation of the literal, mandatory language of the statute, i.e. that lands within a known geologic structure of a producing oil or gas field " shall be leased . . . by competitive bidding." [ 30 U.S.C. § 226(b)]. (Emphasis Added).

As was stated by the Court of Appeals for this Circuit in District of Columbia National Bank v. District of Columbia, 121 U.S. App. D.C. 196, 198, 348 F.2d 808, 810 (1965):

* * * The plain meaning of the words is generally the most persuasive evidence of the intent of the legislature. The plain meaning doctrine must be given application, however hard or unexpected the particular effect, where unambiguous language calls for a logical and sensible result. * * *

Our website includes the main text of the court's opinion but does not include the
docket number, case citation or footnotes. Upon purchase, docket numbers and/or
citations allow you to research a case further or to use a case in a legal proceeding.
Footnotes (if any) include details of the court's decision.

Buy This Entire Record For
$7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.